Date: 20060216
Docket: T-694-03
Citation: 2006 FC 206
Vancouver, British Columbia, February 16, 2006
PRESENT: THE HONOURABLE MADAM JUSTICE HENEGHAN
BETWEEN:
BIOSIG INSTRUMENTS INC.
Plaintiff
and
SEARS CANADA INC. and
ICON DU CANADA, INC.
Defendants
REASONS FOR ORDER AND ORDER
INTRODUCTION
[1] Biosig Instruments Inc. (the "Plaintiff") appeals from the Order of Prothonotary Milczynski dated March 23, 2005, in which she granted the motion of Sears Canada Inc. and Icon du Canada, Inc. (the "Defendants") to strike the Re-Amended Statement of Claim dated March 25, 2004.
[2] The relevant portion of the Prothonotary's Order provides as follows:
...
2. The Re-Amended Statement of Claim with Particulars dated March 25, 2004 is struck and Federal Court Action No. T-694-03 is dismissed.
[3] In her endorsement, she provided the following rationale for her disposition:
Despite the repeated attempts to refine the Claim, the Plaintiff has not pleaded the material facts to support the claim of infringement. I agree with the submissions of the Defendants that they cannot know from the Plaintiff's pleading, what elements of each of the claims of the 014 Patent are infringed by any of Icon's products. The Plaintiff has failed to plead how Icon's products fall within the scope of each element of claim 1 of the 014 Patent and has simply asserted the legal conclusion. Moreover, as a result of attempts to respond to the request for particulars and certain revisions to the pleading, the Statement of Claim itself is scattered and difficult to follow.
The jurisprudence is clear, that it is an onerous test to strike out a statement of claim and dismiss an action rather than order particulars or require an amended pleading. In this case, however, it is also clear that bare assertions without material facts would only lead to a fishing expedition and the hope that the basis for some claim may be established. The statement of claim in its entirety cannot stand and must be struck. ...
BACKGROUND
[4] The Plaintiff commenced this action for infringement of its Canadian Patent No. 2,033,014 (the " '014 Patent' "). This is a utility patent that addresses the use of electronic circuitry in a heart rate monitor. It sets out fourteen (14) claims including a number of dependent claims.
[5] On September 26, 2003, Icon filed a Notice of Motion, seeking to be joined as a Defendant. On October 16, 2003, an Order was issued allowing the joinder of Icon as a Defendant. On October 23, 2003, the Plaintiff served an Amended Statement of Claim on Sears and Icon.
[6] On October 27, 2003, Icon served a Request, including a Demand for Particulars, Request for Documents and a Request to strike certain paragraphs of the Amended Statement of Claim upon the Plaintiff. Then, on October 31, 2003, Icon sought an Order, on consent, extending the time within which to file its Defence.
[7] By Order dated November 10, 2003, Prothonotary Lafrenière dealt with the production of documents by the Plaintiff as follows:
THIS COURT ORDERS that
1. Paragraph 3 of the Order of Prothonotary Lafrenière dated October 16, 2003, for the service and filing of the Statement of Defence or Statement of Defence and Counterclaim of the Defendant Icon, is hereby amended.
2. The Statement of Defence or Statement of Defence and Counterclaim of the Defendant Icon shall be served and filed no later than two (2) weeks after the date of receipt by Icon of the Plaintiff's final Amended Statement of Claim, or provision of particulars in accordance with the final text of the request for particulars agreed to between the parties, if any, as appropriate or from the date of any Order given requiring particulars or striking of parts of the Statement of Claim in the event that the parties do not agree on the final text of the request for particulars, whichever is later.
[8] Between December 17, 2003 and March 16, 2004, correspondence was exchanged between counsel for the Plaintiff and counsel for Icon relating to the contents of the draft Reply to Particulars.
[9] On March 25, 2004, the Re-Amended Statement of Claim was served on both Defendants. On the same date, that is March 25, 2004, the Plaintiff provided copies of the documents that were requested in the Request for Particulars.
[10] On April 7, 2004, Icon filed a Notice of Motion to strike the Re-Amended Statement of Claim without leave to amend, an Order dismissing the action without leave to re-file and alternatively, an Order requiring the striking or amendment with particulars and corrections of typographical errors and corrections in specified paragraphs as well as the production of a "clear" statement of claim without reference to "struck" nor any crossed-out words or phrases. The grounds for Icon's motion to strike were that the Re-Amended Statement of Claim does not disclose a reasonable cause of action; is immaterial or irrelevant; is scandalous, frivolous or vexatious; and is otherwise an abuse of the process of the Court.
[11] The Defendant Icon filed two affidavits in support of its motion, the first being the affidavit of Karen Larocque sworn April 7, 2004 and the second being the affidavit of Richard Hebert sworn April 7, 2004. Ms. Larocque, a litigation secretary to counsel for Icon, deposed that she had knowledge, either personally or based upon information and belief, about the original Statement of Claim, Amended Statement of Claim, Request for Particulars and Documents and the Re-Amended Statement of Claim. Copies of the documents were attached to her affidavit.
[12] Mr. Hebert is the President of Icon. He deposed that the Defendants were unable to know the case against them because the case pleaded by the Plaintiff failed to provide particulars and necessary material facts. He characterized the Plaintiff's amended pleadings as amounting to a fishing expedition in an attempt to utilize the discovery process to find sufficient facts upon which to base its claim. He deposed that particulars were required relative to paragraphs 18 and 28 of the Re-Amended Statement of Claim to support the allegations that every aspect of the Defendants' products infringe upon every element of each of the claims of the '014 Patent.
[13] Mr. Hebert was cross-examined upon his affidavit and in the course of that cross-examination, he admitted that he had not read the pleadings of the Plaintiff nor the correspondence that was exchanged between counsel concerning the provision of particulars concerning the claim. The transcript of the cross-examination was before the Prothonotary when she heard the motion to strike.
[14] For its part, the Plaintiff filed two affidavits in response to Icon's motion to strike, that is, the affidavits of Mr. David Ironside and Mr. Gregory Lekhtman. Mr. Ironside, in an affidavit sworn on June 10, 2004, deposed to the history of the Plaintiff's action and attached copies of certain pleadings and Orders as well as selected correspondence to his affidavit as exhibits.
[15] Mr. Lekhtman is the president of the Plaintiff and the inventor of the '014 Patent. In his response to the affidavit of Mr. Hebert, he deposed that he had personally examined and tested all products listed in paragraphs 20 and 30 of the Re-Amended Statement of Claim. He stated that the Plaintiff had sufficiently set out the grounds for its claim that the Defendants Sears and Icon are infringing the '014 Patent.
[16] The Prothonotary rejected the submissions of the Plaintiff and granted Icon's motion. She struck out the Re-Amended Statement of Claim and dismissed the action. At the same time, however, she granted leave to the Plaintiff to re-file a new Statement of Claim.
SUBMISSIONS
[17] Upon its appeal, the Plaintiff argues that the Prothonotary erred in fact and in law in ruling as she did. It submits that she failed to appreciate the allegations set out in the Re-Amended Statement of Claim. It argues that at this stage of the proceedings, that is with the commencement of an action by way of a Statement of Claim, it is not required to adduce evidence but only need to set out the allegations of infringement that it asserts against the Defendants. In this regard, the Plaintiff refers to Rule 174 of the Federal Courts Rules, SOR/98-106 (the "Rules").
[18] It submits that it has not made only "bare assertions" of infringement against the Defendants but has employed the words "balanced EMG electrodes" as a shorthand expression to describe all of the elements of claim 1 of the '014 Patent and that this is sufficient to establish the essential facts to support the claim of patent infringement, having regard to the fact that paragraph 11 of the Re-Amended Statement of Claim sets out the exact text of claim 1. The Plaintiff argues that it has provided a proper and adequate basis for its claim against the Defendants.
[19] Further, the Plaintiff submits that the Defendants are essentially arguing about the particulars of the Re-Amended Statement of Claim. In that case, the proper recourse is to seek further direction from the Court in accordance with the Order of November 10, 2003.
[20] Finally, the Plaintiff argues that the Prothonotary erred by considering the affidavit of Mr. Hebert since the Rules provide that no evidence is admissible in support of a motion to strike pursuant to Rule 221(1)(a). As well, the Plaintiff says that the evidence of Mr. Hebert is untrue and unreliable, arguing that since he has not read the pleadings or related correspondence, he is unable to say or depose that the Defendant Icon is unaware of the case advanced against it.
[21] The Defendant Icon was the primary moving party upon both the motion to strike and this appeal. It takes the position that the Prothonotary committed no reviewable error in dismissing the action. Icon submits that the Order should be amended to the extent of prohibiting the Plaintiff from re-filing a new Statement of Claim because it is clear that it has no reasonable cause of action against either Defendant.
[22] The Defendant Sears, in its written submissions, supports the arguments advanced by Icon. As well, it submits that notwithstanding the application of a de novo standard of review, the Court should not interfere with a discretionary decision of the Prothonotary if she made no error in principle, understood and applied relevant law. In this regard, Sears relies upon the decision in Lavigne v. Canada(Commissioner of Official Languages)(2004), 261 F.T.R. 126 (T.D.); aff'd. (2005), 339 N.R. 239 (F.C.A.)
DISCUSSION AND DISPOSITION
[23] The applicable standard of review in this case, where the effect of the Prothonotary's Order is to dismiss the action, is the de novo standard. In this regard, I refer to Canadav. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.) and Z.I. Pompey Industrie v. ECU-Line N.V., [2003] 1 S.C.R. 450. The application of the de novo standard here focuses the inquiry on whether the Prothonotary made a reviewable error when she granted the Defendants' motion to strike the Plaintiff's Re-Amended Statement of Claim without leave to re-file a further amended statement of claim, dismissed this action and granted leave to commence a new action.
[24] In my opinion, she did not. The Plaintiff commenced an action for patent infringement. According to the decision in Merck & Co. et al. v. Nu-Pharm Inc. (1999), 4 C.P.R. (4th) 522 (Proth.), a party seeking relief in respect of patent infringement must plead sufficient facts to support the claim. This means that a plaintiff must give details about the activities that allegedly contribute to infringement. This position is clearly addressed by the Court in Dow Chemical Co. v. Kayson Plastics & Chemicals Ltd. (1966), 47 C.P.R. 1 (Ex. Ct.) at page 11 where Jackett, P. said the following:
In general, under our system of pleading, a statement of claim for an infringement of a right should clearly show
(a) facts by virtue of which the law recognizes a defined right as belonging to the plaintiff, and
(b) facts that constitute an encroachment by the defendant on that defined right of the plaintiff.
If the statement of claim does not disclose those two elements of the plaintiff's cause of action, it does not disclose a cause of action and may be disposed of summarily.
[25] In the present case, I am satisfied that the Plaintiff has met the first part of this test, that is a plea that it has a defined right in law. This requirement is met by the Plaintiff's claim to own the '014 Patent. To date, this fact has not been challenged since the Defendants have not filed their statement of defence. However, the mere fact of holding a patent does not inevitably lay the foundation for an action for infringement, without details of the alleged infringing acts.
[26] The Plaintiff says that its Re-Amended Statement of Claim provides the required details, on the basis that the words "four balanced EMG electrodes" are "shorthand" to describe all the elements of claim number 1 of the '014 Patent. The Plaintiff argues that this is sufficient to constitute the facts to support its claim of infringement against the Defendants since the remaining claims of the Patent are dependant claims and that the equipment made by Icon and sold by Sears uses the technology of the "four balanced EMG electrodes".
[27] At face value, this submission by the Plaintiff seems sound. However, upon further analysis of its Re-Amended Statement of Claim, I conclude that it has failed to meet the legal requirements of providing specific allegations of infringement by the Defendants. "Shorthand" is not enough. I agree with the arguments advanced by the Defendants that they cannot, and do not, know the foundation of the claim against them, that is specific allegations of infringing activities.
[28] The Plaintiff argues that the Prothonotary should not have considered the affidavit of Mr. Hebert since the Defendants were moving pursuant to Rule 221(1)(a). That Rule provides as follows:
| 221. (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it
(a) discloses no reasonable cause of action or defence, as the case may be,
...
|
221. (1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou partie d'un acte de procédure, avec ou sans autorisation de le modifier, au motif, selon le cas :
a) qu'il ne révèle aucune cause d'action ou de défense valable;
...
|
[29] The Plaintiff argues that according to his cross-examination, Mr. Hebert has never read the pleadings nor the correspondence exchanged between counsel for the parties. It submits that consequently, the Court should infer that the Defendant Icon cannot say that it does not know the case it has to meet.
[30] Insofar as the Defendants rely on this Rule, I agree that Mr. Hebert's affidavit should not be considered. However, the motion to strike provides further grounds for dismissal, that is that the claim is immaterial or irrelevant, is scandalous, frivolous or vexatious, and is otherwise an abuse of the process of the Court. These grounds are addressed in Rule 221(1) as follows:
| 221. (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it
(a) discloses no reasonable cause of action or defence, as the case may be,
(b) is immaterial or redundant,
(c) is scandalous, frivolous or vexatious,
(d) may prejudice or delay the fair trial of the action,
(e) constitutes a departure from a previous pleading, or
(f) is otherwise an abuse of the process of the Court,
and may order the action be dismissed or judgment entered accordingly.
|
221. (1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou partie d'un acte de procédure, avec ou sans autorisation de le modifier, au motif, selon le cas :
a) qu'il ne révèle aucune cause d'action ou de défense valable;
b) qu'il n'est pas pertinent ou qu'il est redondant;
c) qu'il est scandaleux, frivole ou vexatoire;
d) qu'il risque de nuire à l'instruction équitable de l'action ou de la retarder;
e) qu'il diverge d'un acte de procédure antérieur;
f) qu'il constitue autrement un abus de procédure.
Elle peut aussi ordonner que l'action soit rejetée ou qu'un jugement soit enregistré en conséquence.
|
[31] The affidavit of Mr. Hebert does not specifically address these grounds but, in any event, it is not apparent that the Prothonotary relied upon either the affidavit or the transcript of the cross-examination of Mr. Hebert in reaching her conclusions with respect to Rules 221(1)(b), (c) and (f). In any event, since this appeal is proceeding on a de novo basis, I can consider these grounds anew.
[32] In Sweet v. Canada (1999), 249 N.R. 17 (Fed. C.A.), the Court dealt with a motion to strike a pleading in which similar arguments were advanced concerning immateriality and vexatiousness, pursuant to the former Federal Court Rules. At paragraph 21, the Court said as follows
21. It is not the duty of a judge to redraft pleadings. It is his or her duty, however, to closely examine a proceeding before determining that it cannot be saved through proper amendments. To use the words of my brother Stone in Krause, the judge seized with a motion under rule 419(1)(b) and (c) must decide whether the document is "so defective that it cannot be cured by simple amendment". This determination requires a balancing act which cannot be subject to any definite norms. Each proceeding is to be assessed on its own merits, with consideration being given to, inter alia, the personal situation of the party, the issues and arguments raised, the manner and tone in which they are raised, the number and proportion of allegations that are defective and the readiness of the amendments needed. ... [citations removed]
[33] In the present case, I am satisfied that the Re-Amended Statement of Claim contains immaterial or irrelevant pleadings insofar as it lacks sufficiently clear allegations of fact to support the claim. Although this deficiency is enough to support striking the pleading pursuant to Rule 221(1)(a), it also supports an Order to strike pursuant to Rules 221(1)(b) and (c).
[34] The last challenge to the Re-Amended Statement of Claim is that it constitutes an abuse of process. The Defendants rely on the decision in Kastner v. Painblanc (1994), 58 C.P.R. (3d) 502 (Fed. C.A.) where the Court held that it is an abuse of the Court's process for a plaintiff to begin an action in the hope that something "will turn up". Here the Defendants argue that the deficiencies in the Re-Amended Statement of Claim lead to the inference that the Plaintiff has no cause of action and is hoping to use the pre-trial process, including discoveries, as a means of finding a basis for a claim against the Defendants.
[35] I am not prepared to reach this conclusion, on the basis of the materials filed. The Plaintif has not submitted proper pleadings for the reasons given above but it is not necessary for me to find, at this stage, that it is engaged in abuse of the processes of the Court.
[36] In the result, the Plaintiff's appeal is dismissed. I decline to vary the Prothonotary's Order with respect to commencement of a new action by the Plaintiff. The Defendants shall have their costs to be taxed.
ORDER
The appeal is dismissed. The Defendants shall have their taxed costs.
(Sgd.) "E. Heneghan"
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